Pelicans Ice is a snow cone stand near the local park. To plan for the future, it wants to determine its cost behavior patterns. It has the following information available about its operating costs and the number of snow cones served. Number of snow cones Total operating costs $5,980 $6.400 $5,000 $6,330 $8,000 $6,575 Month January February 6,400 7,000 4,000 6,900 9,000 7,250 March April May June Using the high - low method, the monthly operating costs if Pelicans sells 8,000 snow cones in a month are O A. $17,000 о В. $4,800 O C. $7,400 O D. $2,600

Pelicans Ice is a snow cone stand near the local park. To plan for the future, it wants to determine its cost behavior patterns. It has the following information available about its operating costs and the number of snow cones served. Number of snow cones Total operating costs $5,980 $6.400 $5,000 $6,330 $8,000 $6,575 Month January February 6,400 7,000 4,000 6,900 9,000 7,250 March April May June Using the high - low method, the monthly operating costs if Pelicans sells 8,000 snow cones in a month are O A. $17,000 о В. $4,800 O C. $7,400 O D. $2,600

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter15: Decision Analysis

Section: Chapter Questions

Problem 5P: Hudson Corporation is considering three options for managing its data warehouse: continuing with its...

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Pelicans Ice is a snow cone stand near the local park. To plan for the future, it wants to determine its cost behavior patterns. It has the following information available about its operating costs and the number of snow cones served. Month Number of snow cones Total operating costs January 6,400 $5,980 February 7,000 $6,400 March 4000 $5000 April 6,900 $6,330 May 8000 $9000 June 7,250 $6,575 Using the high-low method, the monthly operating costs if Pelicans sells 12,000 snow cones in a month are $1000 $13,000 $12,000 $20,000
San Juan, Incorporated, is considering two alternatives: A and B. The costs associated with the alternatives are listed below: Alternative A Alternative B Material costs $ 35,000 $ 57,000 Processing costs 36,000 57,000 Building costs 12,000 28,000 Equipment rental 19,000 19,000 Are the materials costs and processing costs differential in the choice between alternatives A and B? Multiple Choice Neither materials costs nor processing costs are differential. Both materials costs and processing costs are differential. Only processing costs are differential. Only materials costs are differential.
Woodruff Company is currently producing a snowmobile that uses five specialized parts. Engineering has proposed replacing these specialized parts with commodity parts, which will cost less and can be purchased in larger order quantities. Current activity capacity and demand (with specialized parts required) and expected activity demand (with only commodity parts required) are provided. Activities Activity Driver ActivityCapacity Current ActivityDemand Expected ActivityDemand Material usage Number of parts 200,000 200,000 200,000 Installing parts Direct labor hours 20,000 20,000 16,000 Purchasing parts Number of orders 7,600 6,498 3,990 Additionally, the following activity cost data are provided: Material usage: $11 per specialized part used; $27 per commodity part; no fixed activity cost. Installing parts: $21 per direct labor hour; no fixed activity cost. Purchasing parts: Four salaried clerks, each earning a $47,000 annual salary; each clerk is capable of processing 1,900…
A company is considering two alternatives with the following costs: Alternative 1 Alternative 2Material costs$87,000 $87,000 Utilities costs$45,000 $44,100 Review costs$41,000 $44,100 Direct labor costs$51,000 $51,000 Identify the costs that are relevant and the costs that are not relevant, given the choice of alternatives. Calculate the differential cost between the alternatives.
Using the High-Low Method to Estimate Variable andFixed CostsLocated on Swiftcurrent Lake in Glacier National Park, Many Glacier Hotel was built in1915 by the Great Northern Railway. In an effort to supplement its lodging revenue, the hoteldecided in 20X1 to begin manufacturing and selling small wooden canoes decorated withsymbols hand painted by Native Americans living near the park. Due to the great success ofthe canoes, the hotel began manufacturing and selling paddles as well in 20X3. Many hotelguests purchase a canoe and paddles for use in self-guided tours of Swiftcurrent Lake. Becauseproduction of the two products began in different years, the canoes and paddles are producedin separate production facilities and employ different laborers. Each canoe sells for $500, andeach paddle sells for $50. A 20X3 fire destroyed the hotel’s accounting records. However, anew system put into place before the 20X4 season provides the following aggregated data forthe hotel’s canoe and paddle…
Woodruff Company is currently producing a snowmobile that uses five specialized parts. Engineering has proposed replacing these specialized parts with commodity parts, which will cost less and can be purchased in larger order quantities. Current activity capacity and demand (with specialized parts required) and expected activity demand (with only commodity parts required) are provided. Activities Activity Driver ActivityCapacity Current ActivityDemand Expected ActivityDemand Material usage Number of parts 192,000 192,000 192,000 Installing parts Direct labor hours 90,000 90,000 72,000 Purchasing parts Number of orders 20,000 17,100 10,500 Additionally, the following activity cost data are provided: Material usage: $20 per specialized part used; $16 per commodity part; no fixed activity cost. Installing parts: $14 per direct labor hour; no fixed activity cost. Purchasing parts: Four salaried clerks, each earning a $45,000…
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